Pentax 2012 Annual Report Download - page 36

Note 1.At the end of the fiscal year under review, there were eight Directors and four Executive Officers. Three of
the four Executive Officers served concurrently as internal Directors.
Note 2.The total amount of remuneration includes remuneration paid to one Executive Officer who retired as of
the conclusion of the 73rd Ordinary General Meeting of Shareholders.
●Overview of Liability Limitation Contract
The Company and its Outside Directors have concluded an agreement that limits
possible future liabilities of the latter prescribed in the first paragraph, Article 423 of
the Companies Act to the higher of a prefixed amount exceeding 10 million yen or
the amount prescribed by the Act.
Audit Committee
The Audit Committee, which is comprised of 5 Outside Directors, formulates the
audit policies and audit plans for each fiscal year, and verifies financial statements,
etc. based on the quarterly reports and year-end reports received from the
Independent Auditor according to such policies and plans. It also interviews the
Internal Audit Division to obtain the results of operational audits, and verifies the
soundness, legality, efficiency, etc. of management. All important matters are
reported to the Board of Directors, and countermeasures are taken as necessary.
In addition to striving to further strengthen corporate governance, the HOYA also
works toward the development of sound internal control systems with the objective
of ensuring appropriate and efficient business management. Each business division
and facility develops and improves the control environment, evaluates and
responds to risk, and verifies and improves the control processes to ensure that the
control systems that operate within each division and facility are the most
appropriate for their operating environment. The head of each business division has
managerial authority and is responsible for improving the business results. Each
head is also obligated to seek to further improve internal control systems, with the
objectives of maintaining compliance, effectiveness and efficiency of work practices,
the reliability of financial reporting and the integrity of management assets. The
Audit Department at HOYA Global Headquarters is responsible for the regular
auditing and verification of administrative processes for each division and business
office from an independent standpoint. It conducts operational audits, checks that
internal control systems are functioning as they should, ensures that there is no
dishonesty, and checks for areas for potential improvement. Problems that come to
light as a result of audit procedures become the subject of a recommendation for
improvement. Particularly important matters are reported to the Audit Committee
and the Board of Directors, as well as to the executive officers. The executive
officers decide upon and issue directives for speedy, appropriate responses.
Frameworks and Policies Concerning Internal Control Systems
Ԙ System for Ensuring Adequacy of Operations:
Contents of the resolutions the Board of Directors of the Company made with
regard to internal control systems set out in (b) and (e) of first item, first paragraph,
Article 416 of the Companies Act and Article 112 of the Ordinance for Enforcement
of the Companies Act are as follows:
(1) Important matters in the execution of duties by the Audit Committee
(i) Matters concerning Directors and employees assisting the Audit Committee in its
duties
Internal Control System